Registering a business in Illinois (LLC, Corporation, DBA, etc) entails some responsibilities that you have to fulfill as part of the requirements of the state to be legally recognized. One such crucial requirement is your Illinois business taxes.
One of the most crucial requirements to starting a business, the amount of paperwork and forms you have to comply for Illinois business tax is no joke. Moreover, if you fail to fulfill these requirements as a business, you may face consequences that can range from overdue penalty or foreclosure of your business.
This simple guide will introduce you to some of the basic business taxes that you will probably be required to complete as an Illinois startup. Remember that business taxes also depend on the nature of your business operations as well as its structure. Do your research on this!
Illinois imposes Corporate income tax on all businesses operating within the state. Also, Corporation franchise tax and personal property replacement tax are also in effect within the state. Aside from this, any income that goes through you personally is also subject to tax on your personal income tax return.
For Illinois Corporate income tax, a standard rate of 7% is in effect with possible adjustments depending on a number of factors. It will vary depending on your business.
To avoid the dilemma of not finding the right tax forms when you’re starting your business, always refer to the Illinois Department of Revenue. Getting your information from a reliable source such as the IL Revenue Department can save you the hassle of verifying if these forms are indeed necessary or not. Make sure to bookmark that website.
Businesses in Illinois are required to pay the mandatory Unemployment Insurance Tax. This tax is imposed so that when Illinois workers are out of a job through no fault of their own, they still receive income while looking for another job. As an Illinois startup, you are not an exception to this tax when you’re starting a business.
Businesses are subject to a sales tax and use tax in the state. Several criteria are enforced for the qualification of sales and use tax requirements, so it is best to refer to this guide provided by the Illinois Department of Revenue. It will tell you everything you need to know.
Completing the requirements for Illinois business taxes does not only require resources to direct you on what to do, but tools that can make your tax life easier and more convenient are also key.
In the compliance of your business taxes, using these tools can be a big help. Below are some tools commonly used for monitoring business taxes and financial transactions for small businesses in Illinois.
Of the tons of small business accounting software on the market today, three names emerge as the most recommended along them – Xero, QuickBooks, and FreshBooks. All of these tools have various strong features to help you manage your business finances and taxes. From expense tracking, invoicing functions, financial report generation, to time tracking, these accounting software are indispensable to business owners like myself.
Please keep in mind that this article is not legal advice. It is simply an informational guide that provides you with an overview on business taxes. If you have any questions, speak with a local professional.